Is Vanishing Profit Good For Online Media?

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When is red ink ever good ink? When you’re trying to succeed online, perhaps.

At Cardiff University’s Future Of Journalism conference, Columbia’s Tow Center for Digital Journalism professor Emily Bell tried to argue against “the idea that the lack of revenue is bad for journalism” and instead for “lack of funding actually being a benefit rather than a negative“.

The profit model can give us the worst journalism, journalism so bad that it actually closes a newspaper,” former Guardian digital director Bell said, referring to News Of The World. “That is the problem journalism has when its primary focus becomes profit.

Now the primary focus is sustainability. If you can seek profitability out of that, that’s also great. But it’s not now the defining factor of why most people are in the journalism business.

It’s very hard to innovate when you have profitability at risk. The collapse in revenues has forced innovation that might not otherwise have happened. It’s not a particularly popular thing to say, but it makes people focus on core purpose more.

“A lot of good journalism comes out of things that dont make money. Good journalism often doesn’t and can’t make money. Someone once told me, if I make money doing journalism, I’m doing something wrong.” With tongue in cheek or a sense of provocation but a degree of sincerity, Bell said: “I cant say lack of money is good for journalism, but… I might say it anyway.”

It might sound bizarre to any news editors facing falling budgets and ongoing downsizing. Guardian News & Media, which lost £43.8 million in 2010/11, has what Bell called a “brilliant” business model – subsidised by a collection of surrounding group assets. But perhaps there is a certain kind of logic – it is in times of general economic austerity that much great technological innovation happens, in down cycles, investors and entrepreneurs often say.

Bell’s assertion, that subsidisation also of the likes of ProPublica and the BBC and through philanthropists or governments, may very well be the primary funding model for news media going forward, might have been music to several, at this conference for academics, who spoke later at Future Of Journalism. But some also expressed caution…

Nothing is any different in our non-profit world,” University Of Iowa researcher Robert Gutsche Jr., who co-founded the IowaWatch.org non-profit site, said, complaining that non-profits’ quest for funding hasn’t gone away, and the onerous pitches to benefactors loads such sites with a set of ethical dilemmas.

It’s still all about the money, we still need money. And other non-profits are not helping. They say, ‘we’re not going to help you with your grant application because we’re all going after the same funds’. We’re spending our time doing fundraising. So how are we any different from any other news organisation?”

“It’s very hard to import the model of private funding of media from the U.S.,” Hogeschool Utrecht professor Piet Bakker said. “Things like the Ford or Knight Foundation, they are very rare in Europe. You always look to the government to do that.”

The vision of independent journalists functioning as online startups to reach sustainability is “utopian”, Goldsmiths University journalism leader Angela Phillips said. “I know what it’s like for free, I did it for quite a long time. As soon as I had children, I had to stop because I had to put food on the table. There are quite a few newspapers being founded, but there’s not making any money.”

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tmcenroe

The issue may not be whether profit is bad, but whether the corporate need for IMMEDIATE profits (to satisfy shareholders) is bad. It discourages reinvestment in the product or people, and forces a short-term bottom line focus, rather than a longer-term focus on the sustainability of the business. In the current environment, it’s not just that profits are slipping, it’s that any investment during this climate, even if it has long-term benefits, is frowned upon because of the impact it has on today’s bottom line.

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